Tourism, Culture, Industry and Innovation
December 8, 2017
Provincial Government Enters Into Agreement with Canopy Growth Corporation on Supply and Production of Cannabis
The Provincial Government today announced it has entered into an agreement with Canopy Growth Corporation for the supply and production of cannabis in the province.
Canopy is a world-leading diversified cannabis company operating a collection of diverse brands, supported by over three million square feet of indoor and greenhouse production capacity in use or under construction. As a result of the agreement, the province has secured a supply of up to 8,000 kg of cannabis and cannabis-related product annually. In addition, Canopy has committed to build a production facility in the province, resulting in the creation of 145 new jobs.
These details were provided at a news conference by the Honourable Christopher Mitchelmore, Minister of Tourism, Culture, Industry and Innovation, and Bruce Linton, Chair and Chief Executive Officer, Canopy Growth.
With no current licensed producer of cannabis in Newfoundland and Labrador, it was important to secure a safe supply of cannabis in advance of the Federal Government’s July 2018 legalization date. While this agreement guarantees the province a supply of cannabis, it does not preclude the province from purchasing cannabis from other licence holders.
Canopy’s future production facility in Newfoundland and Labrador is estimated to be 150,000 square feet. The company will spend over $40 million to construct the facility, and have the capacity to produce 12,000 kg of cannabis annually.
Canopy is committed to having the facility operational by 2019 and to operate it for a minimum of 20 years. In return, the Provincial Government will contribute to costs to construct the facility through reduced sales remittances to the province until the company’s investment is partially recouped. Additional production at the facility that will be exported to Canopy’s markets elsewhere in Canada and around the world will not receive a similar rate reduction.
Canopy will also be eligible to receive up to four retail licences to operate retail stores selling its own product and products from other federally-approved growers. One licence would be adjacent to its production facility and expected to be located in the St. John’s metro area, although suitable production facilities are still being sought. The remaining three licences would be provided for each 4,000 kg of cannabis produced. Two of these additional stores are also expected to be located in the St. John’s metro area with the other being outside the Northeast Avalon region. The company will be subject to regular provincial and municipal approvals for its production facility and retail stores.
The agreement also includes a $1 million cost-shared program on research and development in the province over a five-year period. This investment reflects a joint commitment to bringing value-add research and development to the province, and is expected to leverage additional funding and provide opportunities for researchers and academics.
As referenced previously, the Newfoundland Liquor Corporation will issue a Request for Proposals (RFP) to identify private retailers interested in selling cannabis. Canopy will be required to follow the same regulations for its retail outlets as other private retailers. Those regulations will be included as part of the RFP package.
“This agreement today with an internationally-recognized producer not only guarantees a safe supply of cannabis for Newfoundland and Labrador before the federally imposed July 2018 implementation date, but also results in the creation of 145 new jobs in our province. We will also use this as a framework for other agreements related to cannabis supply and production. Our vision is for an industry which leads to production, job creation, supply chain development and research and development in this province.”
Honourable Christopher Mitchelmore
Minister of Tourism, Culture, Industry and Innovation
“The Newfoundland and Labrador retail framework will allow us to take our existing e-commerce business and well-recognized house of brands including Tweed, DNA Genetics, Leafs by Snoop, and our Craft Grow program, and present that pride and dedication in a ‘brick and mortar’ retail environment. I’m pleased we were able to enter into an agreement that will create local jobs in the region and want to congratulate the Government of Newfoundland and Labrador for choosing a retail model that encourages local growth and a made-at-home experience, while balancing private and public involvement.”
Chair and Chief Executive Officer
Canopy Growth Corporation
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2017 12 08 9:45 a.m.